People picket outside of Paramount Pictures in Los Angeles during the first day of the Writers Guild of America strike on Tuesday, May 2, 2023.
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Writers strike in Hollywood: Some residual checks can barely cover an In-N-Out burger

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May 10, 2023
Hans Gutknecht/MediaNews Group/Los Angeles Daily News via Getty Images
This story was produced by Benzinga and reviewed and distributed by Stacker Media.

Writers strike in Hollywood: Some residual checks can barely cover an In-N-Out burger

Hollywood's writers are on strike against major studios like Walt Disney Co., Comcast Corp./NBCUniversal, Paramount, Warner Bros. Discovery, Netflix Inc. and others. Benzinga compiled information from industry experts and media sources to explain why this is happening—and what might be ahead.

What happened: The Writers Guild of America (WGA) and the Alliance of Motion Picture and Television Producers had until midnight on Monday, May 1 to agree on a new three-year contract, but did not do so.

More than half of the WGA is receiving the minimum wage negotiated from the guild's previous contract negotiation.

As streaming platforms continue to churn out new films and TV shows, or upload an existing series from a network, writers' residual checks have remained low — perhaps as little as $3.

According to "Thor" screenwriter Zack Stentz, "The formulas used to calculate the money owed for various forms of reuse are complicated and vary widely across platforms. As a result, the payments can be relatively tiny or very large — and one of the more delightful parts of being a working screenwriter is opening your mailbox and seeing the distinctive green envelope that residuals come in, not knowing if the check inside will cover an In-N-Out burger or your mortgage payment."

Writers picket in front of Netflix on Sunset Boulevard in Hollywood, California, on May 2, 2023.
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FREDERIC J. BROWN/AFP via Getty Images

Why it's important

The average writing gig in Hollywood is anything but lavish. A streaming studio like Netflix, Amazon Prime or Apple+ typically wants a series to go for just eight to 10 episodes a season. That's a far cry from the days when a sitcom like "Friends" would get at least 24 episodes per season.

Recall the last time writers went on strike, in 2007. Writers pleaded for compensation for movies and shows that were downloaded or purchased on DVDs. No one does either anymore. So the residuals from streaming are key to make ends meet.

The WGA's members make on average around $250,000 a year before taxes, union dues and commissions to agents, managers and lawyers, Stentz tells the New York Times.

The paydays have to last through dry spells that nearly every writer experiences when looking for that next gig, he explained.

People picket outside of FOX Studios on the first day of the Hollywood writers strike on May 2, 2023 in Los Angeles.
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David McNew // Getty Images

The AI factor

Another sticking point for the WGA is making sure that the writers do not have to share residuals in the event that tools supported by artificial intelligence (AI), such as ChatGPT, are used to author scripts.

Writers are concerned their jobs could be replaced by studios utilizing AI to draft stories and, as a result, avoid writers and paying royalties altogether.

The potential for AI disruption comes at a time when the entertainment industry is announcing sweeping layoffs and billions in losses.

What's next: If an agreement with the WGA isn't reached, don't expect movie studios to be overly stressed — at least for now. Executives have reportedly braced for this strike scenario for months by stockpiling scripts.

There's also the go-to savior from the last writer's strike: reality TV. Unscripted shows were a boon in 2007.

Netflix CEO Ted Sarandos boasted during a recent earnings call that the company has a "robust slate" of content from across the globe that will serve the streamer for "a long time."

This story was produced by Benzinga and reviewed and distributed by Stacker Media.

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